ACCT 305 Practice Set = Fall 2022 Practice Set Part 2 With all of the transactions for the October-December 2021 period recorded, the company is facing their first year-end at December 31. The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months: . The December 31 inventory count of computer supplies shows $850 still available. . Three months have expired since the 12-month insurance premium was paid in advance. a b c. As of December 31, Lyn Addie has not been paid for five days of work at $150 per day. d. The computer system is expected to have a ve-year life with no salvage value. e. The ofce equipment is expected to have a ten-year life with no salvage value. f. Three ofthe four months' prepaid rent has expired. g. A count of physical inventory at December 31 resulted in an ending value of$ 7,425. h. Management estimates that 10% of ending Accounts Receivable balance will be uncollectable. i. Interest on the short-term note payable will be paid at maturity (March 2, 2022). Please perform the following tasks: 1 Prepare the Adjusting Journal Entries at December 31, 2021 based on the information provided in a. through i. above and record them on the E2021 Trial Balance' worksheet and post them to the General Ledger. 2 Post the adjusting entries to the General Ledger and extend that data to compute the Adjusted Trial Balance on the '2021 Trial Balance' worksheet. 3 From the Adjusted Trial Balance, prepare the four fundamental financial statements at December 31, 2021: . Income Statement . Statement of Retained Earnings . Balance Sheet . Statement of Cash Flows 4 Prepare the Closing Journal Entries, record them on the '2021 Trial Balance' worksheet and post the Closing Journal entries to the general ledger at December 31, 2021. 5 Extend closing entries to the post-closing trial balance columns on '2021 Trial Balance' worksheet. Important Note: If necessary. update your General Ledger to ensure balances agree with these check gures. You may do this by using Dec 31. 2021 as the date. Correct Balance as the item, and enter the correct balance in the balance column . {2 points) Use the additional information provided in the beginning of this document to prepare Adjusting Journal Entries at December 31. 2021. These entries should be recorded in your 2021 General Journal and then posted to the General Ledger. . (3 points) Record your adjusting entries to the 123121 Trial Balance Excel worksheet and prepare the Adjusted Tn'al Balance as of December 31= 2021. You may want to create a formula in the adjusted balance column for each account. This formula should be such that it amounts in unadjusted column andr'or the adjusting entry column changed; the adjusted balance would change. . {5 points) Prepare the following nancial statements: a. Income statement for the three months ended December 31. 2021. b. Statement of retained earnings for the three months ended December 31. 2021. 0. Balance sheet as of December 31. 2021. Note: Statements may be prepared in worksheet in your Excel le or manually and uploaded as a PDF to Canvas. . {2 points) Prepare and record closing entries in your 2021 General Journal and then post those entries to the General Ledger. . {3 points) Complete the 123121 Tn'al Balance Excel spreadsheet through the closing process: a. Record closing entries prepared earlier in the closing entn'es' columns. b. You may want to use formulas to complete the postclosing trial balance. {These numbers should {must} agree with your General Ledger balances.) . {4 points) To ensure numbers have been turned over property use the SUM formula to total your columns (2 points}. Debit-\"credit columns must balance! Find and credit errors so they balance {2 points). The Chart of Accounts (modeled after the sample Chart of Accounts in handout] established by Computer Solutions is as follows: 101 Cash 307 Common stock 105.1 MR - Alex's Engineering Co. 311 Paid In Capital in excess of par value 105.2 AIR -Wildcat Services 313 Retained earnings 105.3 AIR -West Leasing 319 Dividends 105.4 NR -IFM Co. 403 Computer services revenue 105.5 AIR -Liu Corp. 413 Sales 105.5 AIR ~Gomet Co. 414 Sales returns and allowances 715.1\"th -De|ta Co. 415 Sales discounts 105.8 AIR 4\"; Inc. 105.9 AIR -Dream, Inc. 1.1.11!l Allowance for Doubtful Accounts 502 Cost of goods sold 611 513 119 - Merchandise inventory 523 Wages expense 533 537 640 Depreciation expense-Office equipment Depreciation expenseComputer equipment 125 Computer supplies Interest expense 128 Prepaid insurance InSurance expense 131. PrepsId rent I Rent expense 153 Ofce equipment 552 Computer supplies expense 15! Accumulated depreciation-Office equipment 555 Advertising expense 157 Computer equipment 555 Bad Debt Expense 158 Accumulated depreciationComputer equipment 575 Mileage expense 201 Accounts payable 5?? Miscellaneous expenses 203 Interest Payable 554 Repairs expenseComputer 210 Wages payable I 705 Gain on Sale of Equipment 235 Unearned computer services revenue 505 Loss on Sale of Equipment 240 Short-Term Notes Payable 901 Income Summary 245 Notes Payable unadjusted trial balance No. Account Debit Credit 101 Cash 103,550 106.1 A/R - Alex's Engineering Co. 106.2 A/R -Wildcat Services 106.3 A/R -West Leasing 106.4 A/R -IFM Co 3,000 106.5 A/R -Liu Corp. 106.6 A/R-Gomez Co 2,750 106.7 A/R -Delta Co. 106.8 A/R -KC, Inc. 4,200 106.9 A/R -Dream, Inc. 3,200 107 Allowance for Doubtful Accounts 119 Merchandise inventory 7,861 126 Computer supplies 3,775 128 Prepaid insurance 4,380 131 Prepaid rent 4,500 163 Office equipment 5,000 164 Accumulated depreciation-Office equipment 167 Computer equipment 39,000 168 Accumulated depreciation-Computer equipment 201 Accounts payable 1,100 203 Interest Payable 210 Wages payable 236 Unearned computer services revenue 3,000 240 Short-Term Notes Payable 50,000 245 Notes Payable 307 Common stock 102,000 318 Retained earnings 319 Dividends 7,900 103 Computer services revenue 38,540 413 Sales 10,650 414 Sales returns and allowances 600 415 Sales discounts 43 502 Cost of goods sold 6,650 612 Depreciation expense-Office equipment 613 Depreciation expense-Computer equipment 523 Wages Expense 4,200 633 Interest Expense 637 Insurance Expense 640 Rent Expense 652 Computer Supplies Expense 655 Advertising Expense 2,400 656 Bad Debt Expense 676 Mileage Expense 576 677 Miscellaneous Expenses 400 684 Repairs Expense-Computer 1,305 705 Gain on Sale of Equipment 308 Loss on Sale of Equipment 901 Income Summary Totals 205,290 205,290